Noob credit card question

[Red Squirrel]

I have a basic understanding of how the interest works, and it's actually per day, however if you pay on time you don't get any interest. Now say I buy something near the end of the due date does that part of the balance count towards the interest, or does it only count towards the next due date?

 

[mugs]

If it's after the statement date, then it'll appear on the next statement and doesn't have to be paid until then. To avoid interest, you need to pay at least your statement balance.

 

[Red Squirrel]

Oh ok, so right now it's showing my last statement is $2.61 (lol) even though my current balance is 600ish, so if I pay the 2.61 then I wont get interest correct?

Either way, I just decided to get off my lazy ass and go cash in the check I have so I can just pay it all to 0.

 

[edro]

Grace Period starts after the closing date of that statement.

 

[Christobevii3]

Usually your account has the last date for the current balance that you'll get the bill for. So if it is every 5th of the month, they will issue the bill usually 15-20 days before then. So if you buy something and it is on the current bill, you'll have 15-20 days to pay for it. If its after that, you'll usually have to wait for it to be on your next statement.

Basically if its not on the statement, doesn't build interest charge till the next bill is issued and you do not pay the full amount by that due date.

 

[Vincent]

You receive monthly statements and have a grace period of about 25 days to pay each statement in full. If you pay in full you won't have to pay interest. If you buy something right before your statement date it will count in the bill you receive.

 

[Bignate603]

The easy answer is just to pay your statement balance in full when you get your bill. If you do that every month you'll never pay interest.

 

[Red Squirrel]

Just ended up paying it full so now I know I'm good, unless it does not get processed right away or something, but think I'll be ok.

 

[marvdmartian]

Doesn't really matter if you think you understand the rules or not, as the credit card companies will just change them again to confuse you.

I just paid off a Chase credit card last month. Paid the last $106.41 owed, figured I was DONE with that card.......until this month, when I got a statement saying that I still owed $1.51 in interest that accrued. So I sent them a check for $1.51, with a $0.44 stamp on the envelope! :\

 

[dullard]

I just paid off a Chase credit card last month. Paid the last $106.41 owed, figured I was DONE with that card.......until this month, when I got a statement saying that I still owed $1.51 in interest that accrued. So I sent them a check for $1.51, with a $0.44 stamp on the envelope! :\

Um, did you remember to pay the interest on the $1.51? Next month you'll need to pay the minimum finance charge AND another stamp (unless your CC company is kind and just forgoes the interest you owe). If you owe interest (on a CC or just about any loan) you can NEVER pay it off in full by simply paying the bill. Why? Because by the time your payment is cashed, you'll owe more interest. You must (A) call for a payoff amount or (b) pay MORE than you owe and have it refunded or subtracted from your next statement.

 

[dullard]

I have a basic understanding of how the interest works, and it's actually per day, however if you pay on time you don't get any interest. Now say I buy something near the end of the due date does that part of the balance count towards the interest, or does it only count towards the next due date?

Your question has two answers.

1) If you paid LAST month's bill in full and on time: Then if you buy something between the billing date and the due date, it'll be interest free until your NEXT due date (~ 6 weeks later). This is the ideal time to buy something. I wait for almost ALL major purchases for this magical period where I get to keep my money in the bank for free for 6 weeks (between the billing date and the due date).

2) If you didn't pay LAST month's bill in full or on time: Then if you buy something between the billing date and the due date, you'll likely be charged interest from the day you bought it.

There was a 3rd option just recently outlawed: You had to have two full months paid in full (including all interest on the interst, see my post above) and on time to not get interest. This deceptive practice made it virtually impossible to get a purchase interst free even if you thought it was interest free if you were ever charged interest.

Conclusion: pay in full and on time every month and you don't have to worry about a thing.

 

[kalrith]

(b) pay MORE than you owe and have it refunded or subtracted from your next statement.

That's what I did with the last accruing-interest bill I had to pay off. It listed the daily interest, and I figured out what the extra interest would be a week from when I mailed the check and made the check out for that much. I wound up being about 5 cents over and got a refund the next month.